Muskegon Superintendent Sets Budget Cut Targets Ahead of Sending Deficit Plan to State

Andrew Trzaska | May 22, 2013

Muskegon Public Schools superintendent Jon Felske believes the district needs to cut approximately $7.2 million from its budget next year to be out of its deficit within the two years mandated by the state.

The projection comes in preparation for the district to submit a deficit elimination plan to the state next week. The need for the plan was triggered when the district’s 2013 fiscal year fund balance projections came in approximately $2.6 million in the red last month.  The state mandates a deficit elimination policy show how the district will exit its fund deficit within 24 months.

The $7.2 million to be reduced in the 2013-2014 school year breaks down into two components: a $5.9 million structural deficit that must be removed as part of yearly budget balancing, and a $1.3 million fund additional drawdown of the district’s outstanding fund balance deficit.

Beyond 2013-2013, Felske plans on dealing with any new structural deficits, including state aid funding cuts, and the additional $1.3 million as part of the deficit elimination plan.

A budget document provided at Tuesday’s meeting listed a number of $8.5 million as a worst-case scenario, if virtually no cuts were made from this year’s budget that weren’t already guaranteed. But that scenario will be avoided if the district complies with their deficit elimination plan.

Specifics of the deficit elimination plan will not be publicly published until the State of Michigan approves the plan. That could come soon after next week’s deadline, or the state could require Muskegon Public Schools to rework its plan and resubmit it.

Felske was confident the state would accept the district’s plan as-is:

“I’d say they should be supportive of the things we plan to do in the next 24 months.”

At Tuesday’s meeting, Felske criticized ongoing state budget negotiations in Lansing. Currently, state revenues are projected to be $396.9 million higher than expected, and legislators are currently discussing what to do with that money.

Felske framed the budget negotiations as a double standard, saying the state would take more money from districts if it was in deficit, but is not willing to give districts more money when they have higher than expected revenues.

“It was earned in this fiscal year. It was owed to our students,” said Felske. “If they were owed money, they could take it from us, but if they have money, they get to debate what to do with it.”

Moving forward, board of education has a tough month ahead. They must approve a budget in accordance with an approved deficit elimination plan at June’s meeting.